Do You Still Keep Money Under Your Mattress? Seriously, Stop.

Cash sitting at home or in a regular checking or savings account is losing money, Ortega said, because it’s not keeping up with the rate of inflation. Let’s say you have $10,000. Determine how much you need to have readily available to feel secure ($3,000 for instance), put that in a high yield savings account, and invest the rest. “That money should be helping you make money,” she said. She recommends a 401(k), if your company offers it, or a Roth Individual Retirement Account (IRA).

Don’t sleep on credit.

“It’s true there are bad forms of debt,” Ortega said, like credit card debt that is rolled over month to month. “But good debt allows you to leverage and build wealth.” By good debt, she means credit cards that are paid off every month and on time, as well as federal student loans, which often carry a lower-than-average interest rate. How consistently you pay off these debts determines your credit score, and those who don’t have a good credit score (700 or higher) end up paying more in interest over time, especially on big budget items like a home or a car.

When you file your tax returns this year, take the opportunity to request your free annual credit report and do a financial inventory. Look out for errors or old debts you can easily get rid of (like that $60 you still owe your phone company, for example).

Budget for family support.

“If you are sending remittances home and that is going to be something you do on the monthly, it has to be part of your financial plan,” said Ortega. It can also be a good idea to openly discuss with your siblings how you plan to support your parents, “perhaps setting up a separate account where you all contribute,” she added.

A lack of financial literacy education means that many “end up making a ton of money mistakes over a lifetime that are extremely costly,” Ortega said. But investing for the future is “actually what creates financial stability over time.”

Let’s secure the bag in 2019, shall we?

Here are more stories to read this week.

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WHEN THE NET IS CAST TOO WIDE

A recent New York Times Magazine article tells the important story of Alex, a Honduran immigrant who became collateral damage in a crackdown on MS-13 gang members.